Summary
Despite the strong growth in EU rice consumption and imports in recent years, ACP rice exporters have not benefited from this trend, with EU rice import growth being accounted for by imports from Myanmar and Cambodia, both of which are LDCs. With EU rice consumption and imports stabilizing, the only prospect for increased EU imports of rice from Guyana and Suriname would appear to lie with an extension of existing human rights related sanctions, which have seen certain EBA tariff preferences withdrawn from Cambodia. This would require such measures to be extended both in terms of product scope and geographical coverage to encompass both rice and Myanmar respectively. The EU currently has no plans to take any such action at the moment, with the response of the Government and Cambodia and Myanmar to ongoing enhanced dialogues on human rights being critical to the future evolution of the EU’s trade and human rights policy.
The EC’s December 2019 Agricultural Outlook report setting out the prospects for the EU rice market, it was highlighted how while there would be a highlighting a slight increase in EU rice consumption of 0.3% up to 2030 there would also be a slight decline in EU rice production. This would mainly affect production of the Japonica rice variety, due to the ‘difficult production systems in Europe for submerged crops’. Imports would in contrast be focused on the Indica rice variety (1).
While there is only projected to be slight increase in rice consumption (+5,400 tonnes, this will consolidate the sustained growth in EU rice consumption which has been underway since 2011 (+21.7%). This reflects in part the growing popularity of Asian dishes in European diets, and in part the decline in average EU rice prices since 2011 (-9.1% between 2011 and 2019) (2).
Recent trends in EU* Rice Production Consumption and Imports (million tonnes)
| 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | |
| Production | 1.7 | 1.5 | 1.9 | 1.8 | 1.8 | 1.8 | 1.7 | 1.7 | 1.8 | 1.8 | 1.8 | 1.7 |
| Consumption | 2.4 | 2.3 | 2.3 | 2.3 | 2.3 | 2.4 | 2.4 | 2.5 | 2.6 | 2.7 | 2.7 | 2.8 |
| Imports | 1.1 | 1.0 | 0.9 | 0.9 | 1.0 | 1.0 | 1.1 | 1.2 | 1.3 | 1.4 | 1.5 | 1.4 |
| Exports | 0.4 | 0.3 | 0.4 | 0.4 | 0.4 | 0.4 | 0.4 | 0.4 | 0.4 | 0.5 | 0.5 | 0.4 |
| EU price €/t | 758 | 698 | 543 | 608 | 618 | 593 | 511 | 578 | 596 | 561 | 555 | 575 |
| WMP €/t | 245 | 473 | 420 | 391 | 406 | 458 | 402 | 327 | 356 | 367 | 367 | 378 |
* Figures for in this report for imports relate to the EU27 countries
Source: EC, Agricultural Outlook for Markets and Income 2019-2030’, 19 December 2019, table ‘EU rice balance (million tonne milled equivalent)’, https://ec.europa.eu/info/sites/info/files/food-farming-fisheries/farming/documents/medium-term-outlook-tables_en.pdf
Since 2010 the 55% increase in EU rice imports has largely been based on increased rice imports from least developed country rice exporters, which since September 2009 have benefitted from the full implementation of the EU’s Everything But Arms initiative. This saw rice imports from Myanmar and Cambodia, increase from a mere 0.02% and 2.9% share of EU rice imports in 2010 to a 22.2% and 12.4% share of EU rice imports by 2018 (3).
This needs to be seen against the background of an otherwise tightly managed EU rice import regime.
Main Rice Exporters to the EU (Selected Years – Tonnes)
| 2003 | % share | 2010 | % share | 2018 | % share | |
| EU Total | 1,393,072 | 1,314,837 | 2,024,405 | |||
| ACP | 8.9% | 13.7% | 9.2% | |||
| – Guyana | 102,567 | 7.4% | 146,721 | 11.2% | 158,170 | 7.8% |
| – Suriname | 21,552 | 1.5% | 33,489 | 2.5% | 27,737 | 1.4% |
| EBA | 1.44% | 2.92% | 34.6% | |||
| – Myanmar | 537 | 0.04% | 241 | 0.02% | 448,791 | 22.2% |
| – Cambodia | 1,956 | 1.4% | 38,682 | 2.9% | 250,297 | 12.4% |
| Other Main Exporters | 71.1% | 67.7% | 43.1% | |||
| – Pakistan | 148,161 | 10.6% | 192,936 | 14.7% | 332,740 | 16.4% |
| – Thailand | 248,909 | 17.9% | 368,222 | 28.0% | 290,213 | 14.3% |
| – India | 251,734 | 18.1% | 246,718 | 18.8% | 207,756 | 10.3% |
| – United States | 341,205 | 24.5% | 81,086 | 6.2% | 43,476 | 2.1% |
Source: EC, Market Access Data Base, https://madb.europa.eu/madb/statistical_form.htm
Between 2010 and 2018 the volume of ACP rice exports to the EU market rose only marginally by 3.2% (3), despite the 55% increase in EU rice imports over this period (2).
Perhaps more significantly the average price paid for Guyanese rise over the 2015-18 period compared to the 2010-12 period was some 19.2% lower, while the average price for imports of rice from Suriname was 16.6%. The corresponding decline in world market prices for rice was 11.2%. This made the EU market less commercially attractive.
| Rice Sector Reform and the Impact on ACP Rice Exports to the EU
The single payment scheme (SPS), a system of direct aid payments to farmers entered effect in the rice sector on 1 January 2005, with a period for phasing out of product‐ specific premiums. In parallel the intervention price was set at €150 per tonne, a level which has no influence on normal market price formation, and which is thus solely a ‘safety net’ price. This had profound effects on EU rice market prices which between 2007 and 2019 fell 326%. This considerably reduced the attractiveness of the EU market. |
In recent years however there has been considerable volatility in Guyanese rice exports to the EU. While Guyanese rice exports to the EU grew 7.8% between 2010 and 2018, in 2018 rice imports were down 39.5%, compared to the recent peak level of 2016, when exports to Portugal and Italy together accounted for 72% of rice exports to the EU. By 2018 Guyanese rice exports to Portugal and Italy were accounting for only 54% of total exports to the EU28, having fallen 41% and 72% respectively (3).
Trends in Guyanese and Suriname’s Rice Exports to the EU28 2009-2018 (€ ‘000 / tonnes)
| 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | |
| Guyana | ||||||||||
| Volume | 146,116 | 146,721 | 75,633 | 42,682 | 63,590 | 81,001 | 194,004 | 265,719 | 175,441 | 158,170 |
| Value | 53,463 | 51,595 | 29,178 | 16,819 | 23,610 | 26,777 | 61,996 | 74,790 | 53,451 | 50,133 |
| Suriname | ||||||||||
| Volume | 26,331 | 33,489 | 17,243 | 16,333 | 13,764 | 21,029 | 5,723 | 24,251 | 15,591 | 27,737 |
| Value | 10,112 | 12,517 | 6,736 | 7,631 | 5,907 | 8,349 | 2,458 | 8,141 | 5,115 | 9,325 |
Source: EC, Market Access Data Base, https://madb.europa.eu/madb/statistical_form.htm
Suriname’s rise exports to the EU meanwhile were only 5% higher in 2018 than in 2009, although this has been on a highly variable trend.
Looking forward, while EU rice consumption and imports are projected to grow only marginally, the origin of imports could change. In recent years there has been growing concerns over human rights abuses in both Myanmar and Cambodia.
This resulted in February 2020 a decision from the EC to ‘withdraw part of the tariff preferences granted to Cambodia under the European Union’s Everything But Arms’ (EBA) trade scheme due to the serious and systematic violations of the human rights principles enshrined in the International Covenant on Civil and Political Rights’ (4),
The EC argued its decision ‘addresses the human rights violations that triggered the procedure, while at the same time preserving the development objective of the EU trade scheme’. The EU High Representative for Foreign Affairs, Josep Borrell maintained ‘the duration, scale and impact of Cambodia’s violations of the rights to political participation and to the freedoms of expression and association left the European Union with no other choice than to partially withdraw trade preferences’. He went on ‘the European Union will not stand and watch as democracy is eroded, human rights curtailed, and free debate silenced’, highlighting how for the ‘the trade preferences to be reinstated, the Cambodian authorities need to take the necessary measures’ (4).
Projections EU Rice Production Consumption and Imports (million tonnes)
| Production | 1.8 | 1.8 | 1.8 | 1.8 | 1.8 | 1.8 | 1.8 | 1.8 | 1.8 | 1.8 | 1.8 | 1.8 |
| Consumption | 2.8 | 2.8 | 2.8 | 2.8 | 2.8 | 2.8 | 2.8 | 2.8 | 2.8 | 2.8 | 2.8 | 2.8 |
| Imports | 1.4 | 1.4 | 1.4 | 1.5 | 1.5 | 1.5 | 1.5 | 1.5 | 1.5 | 1.5 | 1.5 | 1.5 |
| Exports | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| EU price €/t | 562 | 551 | 552 | 554 | 566 | 581 | 595 | 604 | 641 | 616 | 620 | 628 |
| WMP €/t | 390 | 387 | 382 | 380 | 382 | 389 | 397 | 403 | 406 | 409 | 411 | 415 |
Source: EC, Agricultural Outlook for Markets and Income 2019-2030’, 19 December 2019, table ‘EU rice balance (million tonne milled equivalent)’, https://ec.europa.eu/info/sites/info/files/food-farming-fisheries/farming/documents/medium-term-outlook-tables_en.pdf
Significantly this affected only ‘selected garment and footwear products, and all travel goods and sugar’ and left unaffected Cambodian rice exports valued at €159.5 million in 2018.
| Comment and Analysis
The granting of duty free-quota free access for LDC rice exporters, which followed on from the full implementation of EU rice sector reforms, ensured growing EU rice demand was met from largely from imports from Myanmar and Cambodia. Imports from Cambodia began to surge in 2013, reaching more than double the volume of imports of 2012 by 2018. A similar trend occurred from 2014 in imports from Myanmar, with imports almost tripling by 2018. EU import prices for rice peaked in 2014 and have and have been between 5.4% and 17% lower in all subsequent years. The opening of duty-free access for LDC rice appears to have undermined both ACP export volumes and prices received for rice exports to the EU. With EU rice demand now stabilizing this suggests that in the coming years the market prospects for rice exports from Guyana and Surinam will be strongly influenced by how the EC’s policy on human rights abuses in Cambodia and Myanmar evolves. The comments by the EU High Representative for Foreign Affairs, Josep Borrell that for full EBA ‘trade preferences to be reinstated, the Cambodian authorities need to take the necessary measures’ in regard to EU human rights concerns, raises the question: what will the EC do if human rights abuses in Cambodia and Myanmar continue? Will the EU take no further measures or will the product scope of the existing withdrawal of EBA tariff preferences be extended to include rice and the geographical scope be extended to include Myanmar? This would appear to be the only scenario in which exports of rice to the EU market from Guyana and Suriname would be likely to increase significantly given EU rice consumption trends. |
Sources:
(1) EC, ‘EU Agricultural Outlook for Markets and Income 2019-2030’, 19 December 2019
https://ec.europa.eu/info/sites/info/files/food-farming-fisheries/farming/documents/agricultural-outlook-2019-report_en.pdf
(2) EC, Agricultural Outlook for Markets and Income 2019-2030’, 19 December 2019, table ‘EU rice balance (million tonne milled equivalent)’
https://ec.europa.eu/info/sites/info/files/food-farming-fisheries/farming/documents/medium-term-outlook-tables_en.pdf
(3) EC, Market Access Data Base
https://madb.europa.eu/madb/statistical_form.htm
(4) EC, ‘Commission decides to partially withdraw Cambodia’s preferential access to the EU market’,
https://ec.europa.eu/commission/presscorner/detail/el/MEMO_19_988